Raising the Bar - Mark Kenber on voluntary carbon standards

Date

20 March 2007

This is an extract from an article written by Mark Kenber, The Climate Group's Policy Director, in Environmental Finance. To download the full article click here.

There is, without doubt, something afoot in the voluntary carbon market. A market that has until now been populated by a heterogeneous group of niche service providers, selling a handful of carbon offsets, is now the subject of research reports and attempts at market harmonisation and seems primed for takeoff.

"If they are well managed and retain their environmental credibility, voluntary offsets can be important as an interim part of the solution and part of a broader carbon reduction strategy"Given the fragmented nature of the market, hard figures for the volume of voluntary emission reduction (VER) projects and transactions are hard to come by. However, a recent report by consultancy ICF International suggests that this nascent market could expand from 10-25 million tonnes (Mt) of carbon dioxide equivalent ({CO2}e) in 2005 to a mid-range of estimate of 400 Mt {CO2}e by 2010. This is equivalent in size to about a third of the Kyoto Protocol compliance market in 2006 - or the total emissions of Spain or the Ukraine.

So what was once the domain of a few pioneering companies looking at carbon neutrality to gain a marketing advantage and individuals eager to reduce their carbon footprints - a sideline to the real business of regulation-driven climate change mitigation - looks like it could now play an important role in cutting emissions.

The growing enthusiasm surrounding the voluntary carbon market, however, does not mean it, and carbon offsetting in general, are without their critics. Arguments abound about the relationship between offsetting and mandatory reduction policies, whether developing countries are treated equitably and whether offsetting is a diversion from changing fundamental patterns of consumption.